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G. Rambabu

NEW DELHI, Feb. 27

IN what could be a homecoming of sorts for Mahanagar Telephone Nigam Ltd (MTNL), 16 years after it was incorporated as a separate entity, its erstwhile parent Bharat Sanchar Nigam Ltd (the then Department of Telecom Services) seeks to bring it back into its fold.

According to official sources, BSNL has written to the Department of Telecommunciations (DoT) seeking a transfer of the Union Government's 56.25 per cent equity stake in MTNL to it instead of going in for disinvestment next fiscal.

If the proposal is accepted by DoT, it would be a prize catch for BSNL which is faced with impending competition from the private operators who are all geared to swamp the telecom market.

While MTNL provides basic services in Delhi and Mumbai, BSNL is the service provider in the rest of the country which does not have that much revenue potential. It is even saddled with the task of connecting unremunerative rural areas which has been a huge loss-making proposition.

Both PSUs also hold the third cellular licence across the country. While MTNL has already launched mobile services in both the metros, BSNL has finalised its plans for the rest of the country.

BSNL has noted that, at present, the freedom otherwise available to all other private operators to enter into any area of the telecommunication sector including the lucrative international segment has been denied to both the PSUs. Combining their synergies would help them overcome the threat from the private operators.

The company is further apprehensive that it will not be allowed to participate in the bid for MTNL when it comes up for disinvestment next fiscal. Both the telecom PSUs were, in fact, not allowed to bid for VSNL, although it would have made a sound business proposition in terms of integrating basic, national long-distance and international long-distance operations.

At the time, DoT refused to back BSNL's claim on the Government's 26 per cent stake in VSNL just days before it was sold to the Tata group. The department declined the request saying that it was too late in the day to consider such a proposal.

This time around, however, BSNL has made its intentions clear, even before the disinvestment process has begun. Especially with both the Tata and Bharti groups having publicly stated that they are interested in acquiring MTNL as and when it comes up for disinvestment.

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